Lumauan v. Commission on Audit
REITERATIONFacts
The Antecedents: Petitioner Ninia P. Lumauan, then Acting General Manager of Metropolitan Tuguegarao Water District (MTWD), a government-owned and controlled corporation, was involved in a dispute concerning the payment of accrued Cost of Living Allowance (COLA) for calendar years 1992 to 1997. The MTWD Board of Directors approved the payment of P1,689,750.00 for this purpose. However, a post-audit by the Commission on Audit (COA) resulted in a Notice of Disallowance, asserting that the COLA payment lacked legal basis as it was already integrated into the employees' basic salaries under Republic Act No. 6758 and Department of Budget and Management (DBM) Corporate Compensation Circular No. 10. The disallowance held Lumauan, along with other MTWD officials and employees, liable. Procedural History: Petitioner Lumauan appealed the disallowance to the COA Regional Director, citing prior Supreme Court rulings that upheld COLA payments for certain government employees. The Regional Director denied the appeal, affirming the disallowance and noting that subsequent DBM circulars prohibited such payments. Lumauan then elevated the matter to the COA Commission Proper (COA-CP). The COA-CP initially denied the appeal, finding it was filed late and lacked merit. The COA-CP reiterated that COLA was integrated into basic salaries and that the defense of good faith was unavailing. A subsequent Motion for Reconsideration filed by Lumauan was also denied by the COA-CP. The Petition: Petitioner Lumauan filed a Petition for Certiorari under Rule 64, in relation to Rule 65, of the Rules of Court, assailing the decisions of the COA. She argued that her appeal to the COA-CP was timely filed and that the payment of COLA should not have been disallowed, citing Supreme Court jurisprudence that entitled GOCC employees to COLA. Lumauan also contended that even if the disallowance was correct, she should not be held liable for refunding the amount due to good faith. The respondent COA maintained that the disallowance was proper and in accordance with law and jurisprudence, emphasizing that RA 6758 and subsequent DBM issuances integrated COLA into standardized salary rates, and that the defense of good faith was not applicable given the circumstances.
Issue(s)
Whether the Commission on Audit (COA) committed grave abuse of discretion in disallowing the payment of accrued Cost of Living Allowance (COLA) for calendar years 1992 to 1997 to the employees of Metropolitan Tuguegarao Water District (MTWD). Whether the appeal filed by the petitioner before the COA-Commission Proper was timely filed. Whether petitioner Ninia P. Lumauan is personally liable to return the disallowed amount.
Ruling
The Supreme Court dismissed the Petition for Certiorari, affirmed the decisions of the Commission on Audit (COA), and directed petitioner Ninia P. Lumauan to return the disallowed amount corresponding to the amount she actually and individually received.
Ratio Decidendi
On the validity of the disallowance: The Court held that the payment of accrued COLA for CYs 1992 to 1997 was correctly disallowed. Citing Torcuator v. Commission on Audit, the Court reiterated that COLA is deemed integrated into the standardized salary rates of government employees under Section 12 of RA No. 6758. This provision is self-executing, making the absence of any Department of Budget and Management (DBM) issuance immaterial. The Court clarified that the ruling in Philippine Ports Authority (PPA) Employees Hired After July 1, 1989 v. Commission on Audit is not applicable as it pertains to situations where compensation packages decreased or were less due to COLA deductions, which was not the case here. The general rule of integration under RA 6758 applies, as COLA is not among the specifically enumerated non-integrated allowances. On the timeliness of the appeal: The Court found that the Appeal Memorandum was filed on time. The Registry Receipt and the stamp of receipt on the Regional Director's Decision indicated that the Appeal Memorandum was filed by registered mail on November 25, 2011, the same day the petitioner received the Decision. Therefore, the COA-CP's denial of the appeal for late filing was erroneous. On the liability to return the disallowed amount: The Court ruled that petitioner Lumauan, as Acting General Manager, was a passive recipient of the allowance, as the Board of Directors approved the payment. Applying the rules on return of disallowed amounts as established in Madera v. Commission on Audit, recipients, including passive ones, are liable to return the disallowed amounts they received, unless they can show entitlement or that the amounts were genuinely given in consideration of services rendered. The Court found no extenuating circumstances, such as undue prejudice, social justice, or humanitarian considerations, to excuse petitioner from returning the disallowed benefit. Therefore, petitioner is directed to return the disallowed amount corresponding to the amount she actually and individually received.
Main Doctrine
The payment of accrued Cost of Living Allowance (COLA) for calendar years 1992 to 1997 was correctly disallowed as it is deemed integrated into the standardized salary rates of government employees under Section 12 of Republic Act No. 6758, and the recipient, including the approving officer, is liable to return the disallowed amount received, absent any showing of entitlement or undue prejudice.